"At 31Dec18 they had $A78mil in cash & bullion less borrowings of $A190mil being $US100mil drawn facility plus 20 billion CFA Mali Bank drawn facility, so net debt of $A112mil.
That is already a turnaround of $A385mil."
yes and AQG's turnaround cost, $A 859 million!!! to build a 1.7Mt/annum sulphide plant (5000t/day). RSG are shooting for 2.4Mt with expandibilty to 4Mt. The costs for RSG were largely for the underground development work that includes the construction of twin declines which should support the expansion of mining in the future. There have also been other capital expenses at Syama that don't directly relate to the sulphide operations, including the building of 35km of roads to Tabakoroni and the construction of the gravity circuit which should help reduce costs in the oxide circuit.
The Copler project is a market furphy IMO. The have gone into significant debt $US 245 million spent over A$859 million in capital costs to mine and stockpile high grade ore (~4.8g/t) on their leach pads so they can pay this significant debt back in about 2.5 to 3 years but they disguise the fact that all this lovely high grade ore that is going to produce the big early cash flow in the first 3 years is not at all representive of the grade of their mine reserves.
Copler's LOM reserve grade is much lower than Syama's.
Copler's LOM oxide + sulphide (Total) grade = 2.06 g/t Au 5.14g/t Ag and 0.12% Cu
Copler's LOM sulphide in-situ grade = (2.56 g/t) and total sulphide reserves is 2.5Mozs (stockpile plus in-situ sulphide ores. Total oxide + sulphide =3.3 M ozs as per DFS (resources may have changed a little since then)
The Syama UG mine alone has sulphide reserves of 6M ozs at a reserve grade of 2.7 g/t, that's almost twice the resrves of Copler sulphide + oxide and 2.4 x the Copler sulphide resrves (and that's without Tabakoroni or the major Nafolo discovery).
So the Copler sulphide story is a story about going into significant debt to mine and stockpile high grade ounces over 3 years just to recover that debt over the next 3 years before transitioning back to lower grade ounces. Once the high grade stockpiles sulphide ore is mined the Copler sulphide circuit will be mining its lower grade in-situ ores that grade slightly less than the Syama sulphide reserve grade through a 1.7M/t sulphide plant whereas Syama will be mining a consistent grade of through a 2.4Mt/annum sulphide which due to the money spent on it in the last 18 months, through the twin decilines and automation, could make the sulphide circuit scalable to 4Mt/annum.
Also from the Copler feasibilty study the total installed cost of US$620.5 million does not include the following
"Items not included in the capital estimate are as follows:
• Sunk costs: costs prior to the completion of the Feasibility Study (i.e. exploration drilling, sample preparation, metallurgical testwork, Pre-Feasibility Study, EIA, etc.)
• Oxygen plant (included as operating cost)
• Mining capital costs
• Owner’s corporate costs
• Allowance for special incentives (schedule, safety, etc.)
• Value Added Tax (VAT) and withholding tax
• Foreign currency exchange rate fluctuations
• Working capital and sustaining capital (included in cash flow model)
• Interest and financing cost
• Risk due to political upheaval, government policy changes, and labor disputes, permitting delays, weather delays or any other force majeure occurrences."
To cut a long story short Syama has bigger ore reserves than Copler, will have a higher installed sulphide processing capacity of 2.4Mt (potentially expandable to 4Mt) vs Copler at 1.7-1.8Mt/annum.
You need to wonder why AQG spent so much on delivering such a low capacity circuit. Once the high grade sulphide stockpile ore is consumed after the first few years they will be reduced to processing 2g/t through a 1.7Mt/annum circuit. Compare that with Syama with 2.7g/t ore through a 2.4Mt/annum circuit which could be expanded to 4Mt. Copler doesn't have the sulphide ore in its open pits to warrant expansion.
The oxide circuit at Copler is also big and hungry at 17,000t per day or 6Mt/annum. They will want to keep the feed up to it or the costs will will creep up due to underutilisation.
I think Syama has a better mix of processing capacity considering the current mix between sulphides and oxide ore reserves.Esh
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